Ocean cargo: New developments at Panama Canal announced

The Cabinet Council of the Republic of Panama approved a proposal to modify the Panama Canal pricing structure, following a recommendation from the
Panama Canal Authority (ACP) Board of Directors.

The Panama Canal is a 77 km (48 mi) ship canal in Panama that joins the Atlantic Ocean and the Pacific Ocean and is a key conduit for international maritime trade. Annual traffic has risen from about 1,000 ships in the canal’s early days to 14,702 vessels in 2008, displacing a total 309.6 million Panama Canal/Universal Measurement System (PC/UMS) tons.

The Cabinet Council of the Republic of Panama approved a proposal to modify the Panama Canal pricing structure, following a recommendation from thePanama Canal Authority (ACP) Board of Directors.

The proposal modifies the pricing structure for all Canal segments: container, dry bulk, liquid bulk, vehicle carriers, reefers, passenger, general cargo and others. Specifically, the ACP will calculate container segment tolls with a slight price adjustment to the capacity charge, and an additional new charge that would apply to the number of loaded containers aboard the vessel at the time of transit.

The newly approved pricing structure includes one amendment to the original proposal, which delays the implementation of the reefer segment increase on the portion applicable to the PC/UMS tons, from January 2011 to April 2011. All other segment pricing modifications will go into effect in January.

“During the past few months we have talked with industry representatives, shipping lines, including government representatives from countries that benefit from the Panama Canal. We have listened to their feedback and have made adjustments to our pricing structure accordingly,” said ACP Administrator/CEO Alberto Alemán Zubieta.

According to Alemán, the ACP selected the tolls implementation date of January 2011 to respond to industry requests of a moratorium on increases in 2010. Also, in response to requests made during the consultation, they have postponed the implementation of the PC/UMS tolls for reefers to April 1, 2011.

“Since the beginning, we have been committed to an open and transparent process with regard to the Canal’s pricing structure. We are focused on providing the safest, most reliable and efficient service for our customers, and the new pricing structure approved by the Cabinet Council reflects this commitment,” Aleman added.

The ACP officially announced its plans to restructure the Canal’s pricing April 27. After a 30-day public consultation period, the ACP conducted a public hearing in Panama City, Panama on June 1, allowing interested parties an opportunity to express their views on the proposal.

On the basis of discussions with industry representatives, shipping lines, and government representatives, as well as the Canal’s own internal analysis, and in view of the world economic situation, the ACP decided not to proceed with a tolls adjustment in 2010 and set January 1, 2011 as the new date for implementing the tolls for all segments except reefers.

June 18, 2010

About the Author

Patrick Burnson, Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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